Andrew Sadauskas

It was a cold Thursday morning when I set out on my quest. My mission? To find the heart of Melbourne’s housing affordability and traffic problems. My quest took me to the middle of Melbourne’s great southeastern sprawl, which now stretches as far as Pakenham.

After a morning spent hunting for it on Melbourne’s public transport, I reached my unlikely destination: the carpark behind the Village Green Hotel, in Brandon Park.

On its asphalt surface stand the cars of about a dozen gamblers, who can’t resist their early morning gaming fix, and little else. Buried under its acres of asphalt, where the morning puters have parked, are several acres of land where houses don’t stand. Across the ever congested Springvale Road stands Brandon Park Shopping Centre; a shrine to the 1980s that Centro’s cash-strapped management now almost certainly regret buying.

If the Coliseum symbolises Ancient Roman cruelty, what does this carpark say about us? Are we addicted to the car like those punters at the poker machines inside? Are we willing to lose the house for our habit?

DO YOU HIGHLY RECOMMEND I GET ON THE BUS?
“[Melburnians drive] because the public transport system we have in Melbourne is inadequate. Governments of recent decades have failed to upgrade, or recognise what they need to do to make public transport to competitive with car travel,” says Jeremy Lunn, from the Outer-East Branch of the Public Transport Users’ Association.

There are different views on how to improve the situation, though. “Best to allow the entrepreneurs to seek out the markets [for public transport] and they will also – catallaxy style – find ways also to cooperate on linkages,” said Alan Moran, of the Institute of Public Affairs.

Such a view is not popular with the PTUA. “Clearly the IPA are living in a fantasy land that knows no sense of reality. One only needs to look at the recent history of transport in Melbourne to realise that this approach can never work. Even the earliest of railway and tramway companies had to be bailed out and rescued by the government as the private firms couldn’t stay afloat. The key to making public transport attractive is frequency of services,” said Mr. Lunn.

“It was believed that density was the key to increasing public transport patronage, though Paul Mees actually found that Canadian cities such as Vancouver and Toronto have similar densities to Melbourne, yet were far more successful in provisioning of public transport,” he said.

Between Monday and Friday, one nearby bus – route 736 – runs only once every half an hour (or less). The first service departs at 6AM and the last service at 11:35 PM. In comparison, Toronto’s route 52 runs every ten minutes, between 6:15 AM and 6:09 PM, every weekday. And, beyond those hours, it runs at least once every half an hour (except between 1:22 AM and 4:54 AM).

“The success of inner city trams has often been attributed to higher densities in the inner city. This myth was again dispelled by Paul Mees, who found that although the suburb of Fitzroy had a greater number of dwellings per hectare, Keysborough had a higher population density. In Keysborough, more people (i.e. families) were living in each dwelling. Clearly the success of public transport in Fitzroy could then be attributed to the frequency of services and superior route layout.”

According to Mees, 10% of Melburnians catch a bus or tram to the train station, compared to 76% of Torontonians. Toronto has a similar modal share to Melbourne, yet only has four train lines. Toronto’s publicly-run buses generally run directly along main roads and connect with train stations, forming a ‘grid’ (unlike Melbourne).

This raises a question: how should a ‘suburban bus grid’ – such as the one suggested by Mr. Lunn and Dr. Mees – be funded? An obvious answer would be to fund it from increased fares. But doing so neglects the fact that it is not merely commuters who benefit from improved public transport: shifting motorists to public transport means less traffic on the roads, and improved access means more potential customers for businesses.

This, in turn, flows on in the form of higher land values: after all, many people would pay a premium to live near decent transport. Existing land owners benefit from improved buses even if they never catch one. In short, higher fares would mean commuters cross – subsidising land owners. This, in turn, means penalising those who act in a socially and environmentally responsible manner (by catching public transport rather than driving), while benefiting those that act in a socially irresponsible manner (by engaging in land speculation).

In order to ensure that these land owners pay their fair share for the benefit, what we would need to do is place a rental charge on the unimproved site value of land (that is, a tax on the value of the land, minus the value of any building or other improvements made to it). What this would mean is that, where a Toronto-style ‘suburban bus grid’ is rolled out, land prices rise, and this rise would be captured by the Site Rental, which is used to fund public transport.

By doing this, we can in effect create a cycle of reinvestment in public transport, where public transport improvements are made, the improvements in land value are captured by the Site Rental, and these are in turn re-invested in public transport.

BUILDING UP, NOT BUILDING OUT
But even without improving public transport, logic tells us that Brandon Park’s publicans would be served just as well if their cars were parked in a multilevel car park, using less land. After the State Government’s recent 2030 audit, why does it make sense to keep the carpark as it is?

After all, according to property site www.realestate.com.au, the asking price for a 3 bedroom house in nearby Mulgrave is $420,000. It would, presumably, only take a small reduction in parking area for the owners to realise literally millions in return.

“Mainly, it’s the planning laws generally that say that for so many apartments, or so many bedrooms, or whatever, you’ve got to have so many car parking spaces, which is quite ridiculous, you’re right,” says Kevin Healey, of the People’s Council for Melbourne. Mr. Healey is also the host of 3CR’s ‘City Limits’ programme.

However, the faulty legislation does not end with mandates on carparking. There is simply nothing to prevent the owners of the Village Green pub maintaining acres of asphalt, speculating that they could sell it for more tomorrow than they can today, while our city sprawls further on the fringes. Nor is there any compelling reason, within our current tax system, to increase the population density on a given piece of land.

A tax on the unimproved site value of land would change this situation. If the owners of the Village Green pub were taxed for holding on to this land, they would almost certainly think twice about hoarding so much land so inefficiently; it would make financial sense to sell it off. Similarly, by building a multi-level carpark on a fraction of the land and releasing the rest for sale, the owners of this pub would also significantly reduce their tax bill, and thus the tax system would have a built-in mechanism for encouraging – and funding – higher density development.

CUTTING THE FRINGE?
An alternative to further development within Melbourne’s existing growth boundaries – on sites such as the Village Green pub carpark – is further growth on Melbourne’s fringe. “Releasing land at will is the key [on housing affordability],” says Mr. Moran.

But that leaves those who would rather live in a Brandon Park that exists, rather than a new one – complete with more carparks, shopping centres, and pubs – beyond Pakenham.

“There’s hypocrisy when the capitalists talk about ‘trying to provide affordable housing’ because, naturally, they want prices to rise all the time. The developers tend to buy chunks of land on the perimeter and build out there, there’s a bigger killing,” Mr Healey said.

Many of those reading this will undoubtedly cringe at Mr. Healey conflating land owners – who seek large economic rents while not contributing to the common pool of wealth – with ‘capitalists,’ who invest their wealth towards plant and equipment that increases the productivity of labour. This is a common mistake made within two dimensional economics.

Terminology aside, however, and Mr. Healey does make a very valid point about the impetus for further urban sprawl. Much of the push for further suburban sprawl is from developers who seek to purchase land on the fringes of suburbia and, with the stroke of a politician’s pen, see it rezoned as commercial and residential land, instantly generating wealth for themselves without actually contributing anything productive. Developers can, by ‘land-banking,’ create artificial shortages of land on the suburban fringes, securing more profits for themselves.

A charge on the unimproved site value of land would remove the incentive to engage in this practice, and instead would (as I pointed out earlier) encourage better use of land within the existing urban boundary.

This would, in turn, bring about what Ontario Greens leader Frank de Jong described as ‘walkable communities,’ where more businesses and services are within walking distance of homes, reducing car dependancy. Having higher density, walkable communities also allows for the more efficient provision of services such as schools, hospitals, and public transport, and makes them available to more people.

A (RARE) MOMENT OF AGREEMENT
Given this is (at times) a contentious debate, it seems amazing, then, that there are points that everyone seems to agree on.

“House owners are also concerned to ensure that land is kept in short supply to ensure they enjoy capital gains,” said Mr. Moran.

“The kind of problem you often face, that when you try to put low cost housing somewhere, you get a massive backlash from people who start complaining about the poor people who are going to live their and their own property values, etc… [Poorly planned high density development] creates the problems you’re getting in some areas of this backlash of people, so you really have to be well planned, it has to be done in ways doesn’t impose on other people, but that can be done.” said Mr. Healey.

Given this, it’s clear that the Village Green Hotel carpark says a great deal about us as a civilisation; perhaps as much as the Coliseum of the Ancient Romans. For the vacant lot and the sprawled carpark are the greatest monuments to the land-owning Caesars of sprawl. And the rest of us haven’t built up the courage to challenge them, by imposing a Site Rental on land; a charge that could be used to fund a Toronto style ‘bus grid’ that would reduce our reliance on the car. This leads us to being a civilisation clinging to the past, in the face of a walkable community future.

As such, in a sense, the Village Green Hotel carpark (along with many other single level carparks, empty blocks, and other wastefully used pieces of land across suburban Melbourne) is at the very heart of our current debates about housing affordability and traffic.